Almost one-fifth of businesses in Scotland do not feel ready for Brexit “at all”, according to a snapshot survey of leading players in the economy.

The Scottish Government-commissioned EY report found Brexit-related uncertainty was a “major concern” for firms north of the Border, affecting competitiveness, profitability and even viability.

Companies cited the risk of higher consumer prices – particularly for food, drink and energy – from short-term currency risks and from tariffs and border disruptions.

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Two-thirds of the 80 participants, which included trade bodies as well as businesses across nine sectors, were not confident the UK would secure a Brexit deal by March.

Although 74 per cent of businesses said they had taken steps to prepare for Brexit, 18% did “not feel ready for Brexit at all”, and only 8% said they felt fully ready for Brexit.

Businesses also raised concerns that Brexit would reduce access to talent at all wage and skill levels, with the food and drink, financial services, life sciences and creative sectors particularly affected.

The report states: “Tariffs and non-tariff barriers will clearly make it harder for Scottish businesses to trade with the EU, and will likely reduce the volume of trade.
“Impacts are likely to be felt quickly, although longer term there may be opportunities to explore alternative international markets and rebuild domestic supply chains.”

Finance Secretary Derek Mackay said it showed why the UK Government should take a no-deal Brexit off the table immediately.

He said: “It captures the authentic voice of Scottish business and offers further evidence of the severe and disproportionate impacts that a no-deal outcome would have.

“Many businesses highlighted the risks to their competitiveness and profitability, some were worried about future viability and a number are already reporting negative impacts on investment, the costs associated with planning for Brexit and recruitment of staff.”

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Separately, a UK-wide survey of 1200 business leaders by the Institute of Directors (IoD) found a People’s Vote was the most popular way out of the current impasse.

he poll found 45% of IoD members backed a second referendum, while 29% would prefer a revised version of Theresa May’s withdrawal deal, and just 23% backed a No Deal Brexit.

The Federation of Small Businesses also reported almost three in five small firms felt the political uncertainty had become a significant barrier to growth. It said UK small business confidence had fallen to the lowest level since 2011, particularly in accommodation and food services, retail and manufacturing.

FSB national chairman Mike Cherry said: “How have politicians allowed it to come to this? “Two and half years on from the Brexit vote and small businesses are looking ahead to Brexit day with no idea of what environment they will be faced with in less than ten weeks’ time.”